Personal savings used to shore up businesses
Many business owners are dipping into their personal savings to shore up the financial security of their firm.
Re-mortgaging or selling their home, taking out a personal loan, reducing their own salary or benefits and investing their personal savings are some of the measures business owners are taking.
New research by wealth manager Evelyn Partners of 501 firms with revenue of £5m upwards, reveals one in five business owners (22%) admit to lacking confidence their business could survive a recession.
Resorting to personal capital comes as 23% of business owners say they are finding it difficult to secure external capital.
Claire Burden, partner in advisory consulting at Evelyn Partners, says that the trend is “worrying”
She adds: “Owning and running a business can be deeply personal, and while it’s honourable that business owners are looking to make personal sacrifices to protect their business and employees, we would only recommend dipping into personal wealth to bolster a business as a means of last resort.
“Instead, we would encourage business owners to seek professional advice from an adviser specialising in business turnaround at the earliest possible opportunity to identify alternative means through which they can shore up their business.”
|Have done this||Currently considering doing this|
|Sold / re-mortgaged home||23%||42%|
|Taken out a personal loan||20%||43%|
|Reduced my own salary / benefits||24%||38%|
|Invested personal savings into the business||22%||45%|